Putin’s Team is United: Talk of a Purge is Wrong

As the Russian government weathers a period of unpopularity caused by the recession, there is talk that Putin is about to purge his cabinet, but this is almost certainly wrong.

An article has recently appeared in The Huffington Post which discusses rumours of an imminent purge of liberals from Russia’s government.

According to this view Russia’s President Putin is coming under increasing pressure from hardliners within Russia’s political elite to carry out a thorough purge of Atlanticists and liberals within the government.

The hardliners are also supposedly demanding a thorough overhaul of economic policy. They want Putin to jettison the current liberal oriented free-market policy in favour of an economic mobilisation of the country to withstand the challenge of the West. The details are sketchy but undoubtedly what is being talked about involves the reintroduction of capital controls and of forms of central planning that go far beyond what Russia has now.

The first point to make about this article in The Huffington Post is that it essentially repeats something that was said a month ago in an article by The Saker published by the Unz Review and on his own website. The similarity is in fact so great that I find it impossible to put it down to mere coincidence. There are clearly rumours circulating and both The Saker and the historian Stephen Cohen (the main source for The Huffington Post article) are picking up on them.

What however are the prospects of a purge of liberals happening in Russia?

The short answer I am sure is none.

The Saker and Crooke are both right to say that the Russian government headed by Dmitry Medvedev is coming under fierce criticism in Russia, with strongly expressed demands by many people for a radical change of direction.

They are also both right to say that Putin is not the target of this criticism and that his popularity is unaffected. Those who criticise the government are not challenging Putin. Rather they want him – as they think – to be himself by sacking the liberals in his government.

It is also the case that in discussion programmes on Russian television criticisms of the government are being increasingly and fiercely made and that some of these criticisms are being taken up by officials like Bastrykhin, the tough-minded head of Russia’s elite crime-busting agency, the Investigative Committee.

None of this however in my opinion points to a purge being in the works. It is a fallacy that the media in Russia is tightly controlled and that no unauthorised criticism of the government is allowed on it. On the contrary the media in Russia – including the television media – is full of debate and criticism, not just of the government but of virtually everything in Russia.

Russia nowadays has an active and diverse public opinion which is no longer afraid to express itself, and it is a mistake to make assumptions about what is happening inside the Kremlin from the things it says.

I have to say that I get no impression that Putin is thinking of sacking the government or any of the senior officials who are currently being criticised. On the contrary he repeatedly goes out of his way to signal his support for them. He did so for example at some length during his recent television marathon. Moreover his meetings with his officials as reported by his website give every impression of being supportive and cordial.

As for the conduct of the officials themselves, I get no impression from the behaviour of people like Medvedev, Ulyukaev, Siluanov or Nabiullina that they feel themselves to be under pressure or that they consider themselves to be at serious risk of losing their jobs.

There is no reason to think Putin disagrees with the current direction of economic policy. That can be summarised as an overriding emphasis on inflation reduction (with the aim being to bring inflation down to 4% next year), strict budget discipline and work to improve the business climate, all done in order to foster an increase in the economy’s investment rate.

All this goes along with a willingness to embrace planning in industrial policy, for example in the aircraft building industry.

I would add that I have seen and heard nothing that suggests the officials and ministers who are being criticised are disloyal to Putin or oppose his foreign or defence policies. Not one of them has so much as hinted at disagreement with policy towards Crimea, Ukraine or Syria.

The supposed tension within the government over the size of the military budget looks to me to be overstated and may be a myth. As I have said before claims Kudrin resigned from the Finance Ministry over this issue are wrong. Claims of disagreement over the size of the military budget are anyway based on the theory Russia is experiencing a budget crisis. That is simply wrong, just as claims Russia was facing a credit crunch were.

The one major area of disagreement between Putin and his ministers has in the past been over pension policy.

There is little doubt the government wants to see the pension age raised. Putin has until recently resisted that idea. However some months ago he finally signalled that he had come round to it. It is unlikely to happen before the Presidential election of 2018.

For the rest, Putin has consistently ruled out capital controls, price controls or proposals to raise income tax thresholds, and he undoubtedly supported the decision taken in 2014 to float the rouble.

Putin’s views on the vexed issue of privatisation also seem to be very similar to those of his ministers.

He is broadly sympathetic to the idea and has shown no wish to reverse the privatisations of the 1990s. However – to the exasperation of many in the Western investment community – he is no privatisation fanatic and clearly feels the government has a continued role to play in the direct management of key enterprises crucial to the economy.

Though he welcomes foreign investment in Russia he is clearly determined to keep key sectors such as energy, banking, national infrastructure and key enterprises important to the defence sector under Russian control.

He has specifically ruled out allowing Western banks from opening branches in Russia. Whilst Western banks are welcome to work in Russia – and many of them do – their operations have to be regulated by the Russian Central Bank in just the same way as those of Russian banks are.

Similarly, though Putin supports foreign investment in Russia’s energy sector, Gazprom and Rosneft – both state-controlled – remain the dominant players with Gazprom still having a monopoly on gas exports.

Today when privatisation is again being discussed it is being proposed – as it was in 2009 – for purely functional reasons – to fill gaps in the budget – not out of some ideological quest to privatise everything. The government intends to keep blocking shares in all the enterprises involved, whilst Central Bank Chair Nabiullina opposes privatising Sberbank, the country’s biggest bank.

The overwhelming impression is of a united team essentially agreed on the main parameters of economic policy.

All of them believe in an open economy where prices are decided by the market through supply and demand. All of them believe in strict monetary and fiscal discipline. All of them agree that some elements of industrial planning and state control should be retained and are essential at this stage of Russia’s development.

If the team is united why then the talk of a purge?

The short answer is that Russia over the last two years has been in recession. It is entirely natural during a recession that the country’s government should come under criticism. It happens in every country.

Though the criticism is loud and strong that does not make it politically dangerous. There are none of the usual symptoms – mass demonstrations, sit-ins, walkouts, strikes – that point to widespread disaffection.

The reason for that is not because the Russian people have been zombified by mass propaganda – as the Western media likes to claim – but because of the form the recession has taken.

Strict financial discipline has paid dividends with a recession that has been relatively shallow with no significant layoffs, bankruptcies, plant closures or mortgage foreclosures. Though incomes took a heavy knock last year because of the inflation spike, employment has remained steady creating confidence that the recession is only temporary. Importantly the two most socially sensitive sectors – food and housing – continue to boom.

There are also political factors. The main political effect of the sanctions on Russia is that they lead to Russians blaming the recession not on Putin and the government but on the West. That in part explains Putin’s extraordinary popularity, though his exceptional political skill, the popularity of many of his policies, and the sense of authority and sheer competence he conveys, would surely have kept him popular anyway.

The fact of Putin’s popularity makes it even less likely he is going to purge his government of people who give every impression of being loyal to him, especially when all the indications are he agrees with them. His popularity means he is under no pressure to do so.

With all the indications pointing to the recession being close to its end, it makes no sense for him to carry out such a purge anyway.

This whole issue of the purge is interesting because of what it says about the nature of political debate in Russia.

It shows that when the government in Russia becomes unpopular the criticism of it that gains traction with the Russian public is that which comes from the patriotic “left” of Russia’s political spectrum rather than from its pro-Western liberal “right”. On that spectrum Putin and his government are significantly more to the “right” than most Russians would like them to be. The Western assumption that Putin’s “regime” is preventing Russians from pursuing their natural pro-Western liberal course could not be more wrong.

However those who look for or want a fundamental change in the Russian government’s present makeup or direction are likely to be disappointed.

The Essential Saker II: Civilizational Choices and Geopolitics / The Russian challenge to the hegemony of the AngloZionist Empire

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54 Comments

There is no doubt now that oligarchy runs the country.
So it was, so it is, and so it always will be!
Putin won’t be for ever, and once he’s gone the treacheous beast will resurface and appear as “Time of Troubles” … “October Revolution” … “Dissolution of the Soviet Union” …

When Putin is gone his memory and his great achievements will resonate like an icon, an almost living hologram throughout Russia and the world, inspiring the next 2 generations to greatness and moral strength. This has already begun, and cannot be stopped.

So, who can kill a devil? Not holy people – they subdue the passions of devils and convert them to the way of good.

Making war with a devil is falling into the trap, becoming bound in animosity, making a false “peace” on the devil’s term’s – joining the prison world of slaves, yoked by hatred, lost to all that might arise fresh and good, bereft of any future, forever.

I suppose this would be the way of the Nationalist. But all that thinking is incorrect, and is failing every day to change this world.

You underestimate the beast.
Haven’t you seen their tricks and dirty deeds.
They are dengerous, calculative, hide in the shadows waiting for the right moment, and they are more than smart.

To defeat a such monster, you have to take the most drastic measures.
I am not communist, but when comes to my approach – (frankly) Stalin was exemplary how to deal with a demon.

At least these treacheous “Mamots” should be expelled and deprived of even one syllab.

I suppose this would be the way of the Nationalist.

Without Nationalists coutries would not exsist, identities wouldn’t exsist.
We always protect “National heritage and treasures”
And when the war breaks out – we are the first in line, and you are probably the last.

The “Beast” (or whatever other name choosen to refer to it) cannot be defeated, never, ever.
It exists.

Just the same as “Good” exists and cannot be defeated ever.

The only thing that can change, is how people react/interact with those two immanent entities.

It is not possible to fight “the Beast”, the fights is only between humans.

So the question is, how to figth people that sided with “the Beast”.
An option is to physically fight them (and kill them).
Another is to spiritually/morally fight them; not killing them, but trying to change their minds/earths.

If you can choose the frame of the fight, the second one is better.

You cannot always choose (Stalin, for example, had no choice, Germany imposed a physical fight).
But nowadays Russia is not under a physical treath like URSS was in the 1930-40s; so nowadays Russia can, and should, choose the terms of the figth.

The fight is not a “pure” 100% spiritual one (“pure purity” never exists in reality), but I’m personally delighted to see that, whenever possible, the spiritual/mind figth is privilegied by Russia. Actual physical/militar action is done only in last ressort.
That is the right way to fight “the Beast”.

PS: words have also meaning that comes from cultural/historial reasons. “Nationalism” is not (maybe it once had that meaning, but not anymore) simply “nation + ism.”
“Nationalism” came to mean (maybe by corruption of its use from nazis, I don’t know, but that is its current meaning) “a supremacist philosophy or one’s nation being superior to others, and allowing injustice and theft oinfliged to other nations”.
If you mean “love of one’s nation, tradition, culture and history, defense of them, in a non negative view of other nations”, then the word to use is “patriotism”.

It’s like “liberal”, even if etymologically it meant “someone that pursues freedom”, history and actions of self-named liberals had given a differnet meaning to the word.

how is then possible that “the Beast” still exists since the beginning of humankind?

its’ influence can be fought, but its existence cannot be terminated.

It’s like “death”, it exists; and cannot be defeated.
But it’s possible to have an influence on how it manifests (reducing illness, reducing accidents, reducing murder, etc), and make death by old age be as humane as possible (not hiding it as a shameful thing, but instead accompaniating the eldelrly until the end).

“The Best” (that I call “Evil”, and, BTW, I’m secularist, still I believe in “Good” and “Evil”) cannot be “destroyed” by anything human. But while humans cannot have any influence on the existence of “Evil” (nor on the existence of “Good” for that matter), they can have influence on themselves.
While “Good” and “Evil” exist by themselves; the human actions that is of our own decision (people that believe in God think that this ability to act by ourselves, that is decision making, is the highest gift from God).

We cannot make “Evil” (that is, the very notion of it) disapper; the notion of “Evil” cannot disappear otherwise the notion of “Good” disappears also. The same way as you cannot abolish “up” without abolishin “down” at the same time.

However, we can, ourselves as humans, decide what to do and how to act.

Then one might also say that “You cannot abolish positive numbers without abolishing negative numbers at the same time”, which I regard as true. But the reverse is not true, since the negative numbers are a relatively recent extension of the system of positive integers. Even the concept of the number “zero” was introduced to Europe only relatively late. This may perhaps be a digression, but going back to “up” versus “down” – both concepts intimately linked to the physical force of gravity – we might regard gravity and anti-gravity as an example of such a pair of opposites, both dependent upon the other. However, anti-gravity is not a force known in the real world. “Good” and “evil” are not so easy to make sense of – far more difficult than mathematics with its clear axioms and definitions.
Good for one is often bad for another. Defining these concepts in an absolute sense, might be as bad as relativizing them.

Grieved
I could not agree more with you. We see this in every situation, whenever the devil can force us to be like him, he has won…if we use his methods, his thinking, his weapons and also take over his feelings, what will make us the different to him?
Is good to see this kind of thinking. Thank you

Tell that to Indigenous people in Australia, North America, Africa, South America.
There are time if you do not resist they just squash you like cucarachas under the shoe.
Some even done in the name of God ( Abrahamic )

Nationalist
You’re right, that Beast must to be destroyed, even if the fight will lead to the END.That Beast is changing colors, shapes and forms in time and space. That Beast expects, even demands peace and mercy from us, meanwhile she is merciless and cruel. She is clothed in sheep clothes but she is a wolf. When you think you got her in your hand, she disappears between your fingers, exploiting the smallest lust you have. So, that Beast is real and has a name in some places.

Grieved, your comments are often very wise,
but what big eyes your beast has…
“All the better to see you with my dear”
Oh… what big ears he has
“All the better to hear you with my dear”
…and what big teeth…“All the better to eat you with my dear!!!”

Dear ioan
The beast will be destroyed, no doubt…but it will not be us who will achieve this, at least no only us…and it will be not using its weapons and thinking like he does…our and the beast’s destinies are different…so are our natures of a different kind. That’s what I understand from Grieved words, and I agree…

Dear Vercia, you know better than I do, the situation created in Venezuela. Hugo Chavez was defeated by the Beast. As long as he lived, he has spoken out against him even at the UNO, remember the “smell”.

Putin achievements are but a small fraction of what Lenin/ Stalin team had achieved.
Everything Putin has now has basis in 70 Soviet years that built industrial and scientific base upon which all modern Russia rests, Russia used to waste a lot of energy and resources upon unnecessary arms race, so called allies and some ballast in Central Asia and Caucasus . it is not longer the case . Putin major achievement is that he as a intelligent and smart man was capable of bringing some order into chaos that erupted after 1990 and has so far avoided big mistakes.
However, considering what is going on now, he still got illusions as he did not remove those connections with the West which made sanctions possible and failed so far to re-industrialize Russia. High oil prices indeed helped a lot. His another achievement is that he did not wasted those money.
Compared to Gorby and Yeltsin he definitely looks like a genius.

“There is no doubt now that oligarchy runs the country”
Now? Tell me when oligarchy has not run any and all countries? Unfortunately, in spite of all rhetoric to the contrary, oligarchy in all of its forms has run countries throughout history.

The beast is modern capitalism which had entered rotting state. Before it was too early to say that since capitalism still was able to adjust and grow but now it is not growing, it is cannibalizing the host.
In any case, constant growth on limited planet is impossible. Capitalism used ot be useful but had outlived usefulness and if we do not get rid of this beats it will get rid of life on the planet.

he (Putin) is no privatisation fanatic and clearly feels the government has a continued role to play in the direct management of key enterprises crucial to the economy.
______________

All complex systems require some sort of intelligence and feedback. A national economy is complex. Free markets cannot do long range planning, or issue credit into the commons – the lead time and investment scope is beyond quarterly profit taking.

Government’s crucial role is inelastic markets, where there can be no ready price competition. For example: ports, bridges, roads, sewers, electrical grid, and natural monopolies – these inelastic sectors must be regulated or government owned to deliver the lowest price.

Money is part of the commons – it gets its law by it stamp. A certain conceit occurs in Western Illuminist banking where hypothecations of corporate banking credit are popped into existence when making loans. This action means new borrower is also new debtor who creates the credit upon his signature. This brain twisting operation means that the new debtor is simultaneously both the creditor and debtor. Banker is merely an agent who creates debt instrument, the actual authority is the signature and willingness of new debtor to be chained and yoked to debt means.

This three party arrangement is the insertion of a parasite between the two way evolutionary relations of man. The parasite takes usury for his operations, and this cost of credit is high as it multiplies itself through the price system. (A profit from one chain in production passes its higher price onto the next link in the chain.) Say’s law cannot operate well in this scheme.

Government should issue the fiat (government legal money) and not allow private banking corporate money to exist. This notion is in accordance with the American Constitution. But, American’s gave away their money power in 1913.

Putin’s Russia need not follow in the mistaken footsteps of America. It is good economics to deliver the lowest price, which means a government role in inelastic markets and the commons. Russia could really take off and be the lowest cost producer and the most efficient economy if they issued debt free no cost treasury money for transactions and savings, and also issued sovereign credit into production modes.

Russia is achieving balance, this could be fate or on purpose. The current sanctions are allowing Russian economy to evolve away from extraction of natural resources to one more balanced, where Russian labor can make goods as prices.

But, Russia still needs to fully claim their sovereign money power, and then inject into production channels. There is a lot of headroom left to allow Russia’s bounteous earth to meet skilled labor to then produce. Even a small population with a proper money system can do amazing things, for example Canada’s experience from 1938 to 1974.

An interesting comment…..one does not hear mention of Say’s Law much these days, which is important in understanding the primacy of wealth production as regards delivering prosperity to
a nation and the world.

You mention “Price Elasticity” and it would be in a nation’s interest to protect prices for those who actually produce wealth. The problem is that there is a fallacious fixation as concerns low prices, for raw materials, as somehow helping the economy. Quite the contrary, it is low prices, for raw
materials, particularly agriculture, which is what fuels the selling of credit and thus debt.

It was the collapse in agricultural prices that caused the Great Depression, starting after World War I, and it was the implementation of Parity, finally in 1942, which was the basis for winning the war, and the prosperity afterwards, until 1953 when Parity was finally dropped, in favor of selling people credit, such that we could get into debt, which we have done…..to the tune of quadrillions of dollars.

Parity, means fair, and the Parity Prices, to which the Steagall Ammendment in 1942 specified was that the markets must pay between 90-110% of the Parity Price of said commodity, say wheat, corn, cotton etc. The Parity Price was calculated to a “Base Period” of the period of 1910-14, when
income/purchasing power of Agriculture was in line with that of manufacturing and service sectors. This was seen as a time of an optimum relationship of the feedback mechanisms working within the country to the nation’s advantage all around.

You see in order to have prosperity one needs to make a profit form the production of essential wealth. Money, debt and credit are not wealth, unless they reflect real wealth production, which thus gives the currency an earned income value based upon the production of wealth that keeps us alive and is the basis for all other economic activity. Sorry loaning credit is not an economic activity, it is a canard. For if a farmer needs a loan to buy seed for next year, then that business is not working. But this is the situation that we have, one that does not work, because presently the average agricultural product is being sold at only 35% of Parity, which means a loss of trillions of dollars in profit, that once was evenly distributed across the nation in the most decentralized manner and prosperous one in the world.

The relevant book, Charles Walter’s “Unforgiven….The American Economic System SOLD for Debt and War” chronicles the work of Carl H. Wilken and the Raw Material National Council who made some of the most important discoveries about economy, from the economic record of the U.S, which demonstrated the true cause of the Great Depression, low agricultural prices.

What Wilken found from the actuarial record is that for every dollar earned in agriculture there would be a corresponding seven dollar earnings for national income. Underpay agriculture and other raw material producers and then there is not enough money around to let the wheels of industry work.

Walter’s book is important in many ways, but the subtitle tells the important story, for yes the American Economic System was and has been SOLD for Debt and enforced by war, war fought by
young Americans with no economic opportunity, because we no longer had a system that could support industry hear at home, which was because the democratized profit system based upon
agriculture, raw material production and manfucturing, was not protected by Tariff, but that labor
would be forced to the world’s lowest denominator, instead of wages around the world be brought up to the American standard.

What I would like to offer here, and to the world, is the forgotten policy perspective of
what in the United States was referred to as Parity, Agricultural Raw Material Parity,
implemented with success from 1942-53, and to which is still law per the 1933 Agricultural
Adjustment Act, 7 U.S.C. 602, towards delivering a prosperous, debt free economy. This is the only thing that worked, and will work, but the financial elites did not want this, no they wanted to make
people buy cars on credit in the 1950’s and sell the world cheap food in order to dominate the world
with its cheap food, destroying any nation’s ability to develop its own resources.

Intelligent people should look into this economic analysis termed “Raw Materials Economics”

Hear are two resources.

The Nature of Wealth by Fred Lundgren (Fred predicted the 2008 collapse in 1994!)

It was the collapse in agricultural prices that caused the Great Depression, starting after World War I, and it was the implementation of Parity, finally in 1942, which was the basis for winning the war, and the prosperity afterwards, until 1953 when Parity was finally dropped,

Not really: It was private bank credit hypothecated into existence in the roaring twenties. This credit then pushed prices on Wall Street. Prices increased, which leads people to take out more private loans, which then makes higher prices in a feedback loop. Private banks of that era even put the stock on their double entry ledger to then create more credit.

Note that I mention sovereign credit, not private bank credit. Sovereign credit can be constrained to go after only those improvement items, such as the commons, which can be paid back easily through productivity increases. So, credit has its place, if it is used properly.

To get out of the great depression, the Reconstruction Finance Corporation received exogenous money from the Treasury. This money then was spent into the supply on production modes, then went on to become salary, then went on to pay down private debts (those same debts formed in the 20’s).

Positive use of this exogenous credit (created as line items on the budget), were electrifying farms, building roads, etc. This then caused a general positive feedback loop.

The war was even more exogenous spending, which then paid off private bank debts.

Germany was a similar situation, where MEFOBILLS created a treasury like money through a shell corporation much like RFC.

In Canada and Australia they used state banks, which had stock owners in their Ministry of Finance, also called crown banks. These banks just issued debt free money, which then went on to pay down private debts.

With regards to collapsing farm prices, that was a symptom not a cause. The nature of private credit is that it goes into the ledger to then disappear. The draining money supply (really private bank credit) forces a price collapse. There is no money to pay labor to pick crops off the ground.

During the great depression crops stayed on the ground and withered, even though labor was available.

An interesting comment…..one does not hear mention of Say’s Law much these days, which is important in understanding the primacy of wealth production as regards delivering prosperity to a nation and the world.

You mention “Price Elasticity” and it would be in a nation’s interest to protect prices for those who actually produce wealth. The problem is that there is a fallacious fixation as concerns low prices, for raw materials, as somehow helping the economy. Quite the contrary, it is low prices, foe raw materials, particularly agriculture, which is what fuels the selling of credit and thus debt.

It was the collapse in agricultural prices that caused the Great Depression, starting after World War I, and it was the implementation of Parity, finally in 1942, which was the basis for winning the war, and the prosperity afterwards, until 1953 when Parity was finally dropped, in favor of selling people credit, such that we could get into debt, which we have done…..to the tune of quadrillions of dollars.

Parity, means fair, and the Parity Prices, to which the Steagall Ammendment in 1942 specified was that the markets must pay between 90-110% of the Parity Price of said commodity, say wheat, corn, cotton etc. The Parity Price was calculated to a “Base Period” of the period of 1910-14, when income/purchasing power of Agriculture was in line with that of manufacturing and service sectors. This was seen as a time of an optimum relationship of the feedback mechanisms working within the country to the nation’s advantage all around.

You see in order to have prosperity one needs to make a profit form the production of essential wealth. Money, debt and credit are not wealth, unless they reflect real wealth production, which thus gives the currency an earned income value based upon the production of wealth that keeps us alive and is the basis for all other economic activity. Sorry loaning credit is not an economic activity, it is a canard. For if a farmer needs a loan to buy seed for next year, then that business is not working. But this is the situation that we have, one that does not work, because presently the average agricultural product is being sold at only 35% of Parity, which means a loss of trillions of dollars in profit, that once was evenly distributed across the nation in the most decentralized manner and prosperous one in the world.

The relevant book, Charles Walter’s “Unforgiven….The American Economic System SOLD for Debt and War” chronicles the work of Carl H. Wilken and the Raw Material National Council who made some of the most important discoveries about economy, from the economic record of the U.S, which demonstrated the true cause of the Great Depression, low agricultural prices.

What Wilken found from the actuarial record is that for every dollar earned in agriculture there would be a corresponding seven dollar earnings for national income. Underpay agriculture and other raw material producers and then there is not enough money around to let the wheels of industry work.

Walter’s book is important in many ways, but the subtitle tells the important story, for yes the American Economic System was and has been SOLD for Debt and enforced by war, war fought by young Americans with no economic opportunity, because we no longer had a system that could support industry hear at home, which was because the democratized profit system based upon agriculture, raw material production and manufacturing, was not protected by Tariff, but that labor
would be forced to the world’s lowest denominator, instead of wages around the world be brought up to the American standard.

What I would like to offer here, and to the world, is the forgotten policy perspective of
what in the United States was referred to as Parity, Agricultural Raw Material Parity,
implemented with success from 1942-53, and to which is still law per the 1933 Agricultural
Adjustment Act, 7 U.S.C. 602, towards delivering a prosperous, debt free economy. This is the only thing that worked, and will work, but the financial elites did not want this, no they wanted to make
people buy cars on credit in the 1950’s and sell the world cheap food in order to dominate the world
with its cheap food, destroying any nation’s ability to develop its own resources.

Intelligent people should look into this economic analysis termed “Raw Materials Economics”

Hear are two resources.

The Nature of Wealth by Fred Lundgren (Fred predicted the 2008 collapse in 1994!)

MEFOBILLS
It’s an interesting question what’s best left to markets and what needs government planning. I came across an old Marxist philosopher who pointed out that the role of markets is already much reduced. A large part of the economy is now planned within large multinational corporations. Governments are a forum where the corporations negotiate the rules of the game with each other. Neither corporations nor governments have so far proved willing or able to focus their planning on the interests of the people. A mix of government and corporations need not be any more likely to benefit the people than either on its own.

I was puzzled by your strictures against money and credit. I’d have thought the usefulness of money is obvious. Likewise, credit. And interest rates are surely just the price for borrowing and only usurious when someone has cornered the market. Financial markets are clearly malfunctioning. Is it possible your diagnosis is wrong: financial markets are useful, but when the intermediaries (i.e. the financial institutions) capture the regulator the result is harmful.

Credit has a time base, a time dimension, related to its mirror – the debt instrument. It comes into being against some sort of property. In the U.S. it is hypothecated into existence against land. 97% of U.S. money supply is private credit. 70% of the credit is mortgage loans.

Ergo, the money supply pushes land and property prices. Ergo again, this is false economy. The market is not finding price properly.

Price pushing on land and housing is really a tax on labor, and hence says law does not work.

Money, especially debt free money, floats relative to goods and services production. It has no cost, especially if it has been circulating for some time. This then allows goods and services to be transacted very cheaply, and does not add usury costs to the pricing system.

This is what I mean when earlier I said that Russia could become the lowest cost economy – if they do things right.

What do you mean when you say that credit is “hypothecated against land”? If you mean that bank loans are extended against collateral, there is nothing sinister in this. The lender merely requires some guarantee of repayment

And a loan extended by the bank against collateral for purchase of property – an asset in the bank’s balance sheet – does not in any way cause the money – the corresponding liability in the bank’s balance sheet – to be “hypothecated”. The seller of the property is not constrained in what they do with the money they receive from the sale.

If you want to determine the effect of credit and money supply on prices, you have to look at the aggregate level, not at individual markets.

I’m not sure what you mean by “debt-free money”. All money, even high-powered money, is a promise to pay.

I’m also not sure why you talk of usury (i.e. lending at unreasonably high or extortionate interest). The interest rate on a loan is the price to be paid for the use of the money. It’s a price like any other. If the financial markets are working, no-one can extract an exorbitant interest rate from borrowers. Similarly, no-one is going to be daft enough to let someone else use their money for free.

Usury is a power relation, where one is party is using fiction to take real wealth from producers. The church seems to understand this.

For example, getting Russia to hypothecate their lands/oil/natural resources in terms of Dollars and Euros. This then leads to external debts denominated in another country’s currency. Then the new credit (dollar and euro) points at Oligarchy, who then grab the earth. From then on the new Oligarchs charge high prices for their “rents” on land/resources. These high prices are a usury relation. The market “appears” to be pricing, but it is a scam. Free marketers never seem to understand these deeper mechanisms.

The dollars and euros, soon flee the country for overseas markets and hence high value goods are then imported. Russian labor cannot make goods as prices, as the basis of all economy is earth +labor.

This actually happened in post Yeltsin years, so the point is relevant. High value Russian labor was walking around drunk. Never let your debts exist outside of your law. Erasing debts or paying them off through future productivity is a law like gravity, do not abrogate this law. DO NOT DENOMINATE YOUR DEBTS IN FOREIGN CURRENCY! Greece is a perfect example of not paying attention to this rule.

Another rule is: All external trade is really only barter. A bancor, or third money system needs to be in place to allow goods exchange across trading nations.

Russia and the church should insist on a trading currency, ideally a bancor.

Schacht post Weimar years used a mechanism that allowed balanced trade, and also allowed Germany to escape “international finance” otherwise accurately described as Jewish finance.

The thing with this article is that Russia does about 6% business with the USA. Trade never developed with them due to a trance of sanctions the U.S. has had on Russia for decades. This will continue and it is a good thing that the U.S. is threatening its own business to keep out of Russia. PCR likes to attack Russia for not following his (an American) policy. Who is right? only time will tell.

“Today when privatisation is again being discussed it is being proposed – as it was in 2009 – for purely functional reasons – to fill gaps in the budget – not out of some ideological quest to privatise everything.”

The heart of the criticism of Kremlin policy is that they don’t have a working ideology or even coherent set of ideas. Things are situational and tactical. Being friends with and equals to partners in Europe is not remotely sufficient.

More broadly, one gets the feeling that Alexander doesn’t sense the depth of the problems that have accumulated in Russia over the last ten years or so. The old model isn’t working and the model in the short-term is to have lower salaries than China. A serious restructuring is needed, and the only question is how and what the end goal is. Hence the need for an ideology or plan deeper than trying to build a commercial airplane. And one of the big problems with oligarchies is that they have a tough time adapting to changes.

I don’t have the answers but would argue that some variant of the National System of Friedrich List and a study of the ideas of Glazyev et al. at the Izborski Club or Mikhail Khazin would be a start. And a key part of that is gaining more control over the financial system. And even supporters of Putin have argued that a big failure in his time is that corruption is no better. This leads to all kinds of economic and geostrategic problems. These problems lead to other problems, such as the common idea that the NAF didn’t take Mariupol in order to make Akhmetov happy. This is demoralizing, and, even if not true, it seems like it would be true.

As for other ideas, well, how about a one-off tax on all the oligarchs who gained their loot back in the 1990’s? That could bring in a lot.

As for an ideology or general coalescing of ideas and industrial projects, well, all I see is the magic of PR from a Surkov-like brain. Impressive, but shallow and not filling. It will only last a few years. So I would prefer an approach like Churchill’s of offering “blood, toil, tears, and sweat”. But all my ideas require a move to some degree to a crisis- or war-time planning mode. In other words, corruption in the space industry is treason. As long as your financial system is dominated by the West, it won’t be hard for the NSA to find out who in the space program has terrible gambling debts from trips to Monaco. No amount of PR will do anything about this. So my ideology would be that the West has gone bad and is dangerous and Russians have to sacrifice to industrialize and that many unfortunate things will likely happen, such as tourism being damaged. I am not Russia so I really have no idea how ideas like promoting the very long meme used in Japan of “catching up to the West” as something to motivate everyone for decades.

This isn’t meant to be a hard attack on Putin. I understand the stall tactics and hope that the West will become more reasonable over time. But the odds of the West becoming reasonable are a lot higher if Russia has a strong base in electronics, robotics, nanotech, drones, etc.

I don’t think there is Yalta-like agreement with current US administration.

However, the US is facing a very special presidential campaign; it’s speical as rarely in its story that “exceptional” country had campaigns where real politiclal choices could be done.

A lot of of elements show that things would be better for the World if Trump is president.

So, currently it is best for Russia to wait.

On the other side, the war party in the US is trying to escalate to an incident (not a war) that will deteriorate the relation to a point that it would be impossible for next US administration to go back.

My hope is that Putin showed a great capacity to not fall into such traps.

you live only one life. Even if the whole human society around us is hopeless, there’s no excuse to let our lives be filled with sadness and desperation. We’re here to sustain the civilization via our creativity. You are German, you should know that better than me (“Hier stehe ich, ich kann nicht anders, Gott helfe mir, Amen”).

thanks for caring.
But what am I supposed to do?? To ignore the facts and join the Matrix?

As for your quoted prayer: Hinestly, I never in my life heard that. You live near the borders to Bavaria and Austria. They have a completely different population which _really_ cannot be expected to be similar to me.

If I am a German, then a Soviet-East-German.
And instead of such prayers here is how my childhood looked like:

”There is no reason to think Putin disagrees with the current direction of economic policy.” Yes, but I rather think that this is the problem. Russia is under siege, and a war economy is necessarily different from a peace time economy. Russia is dangerously exposed in geo-financial terms. As the economist Michael Hudson has pointed out Finance has become the weapon in a new type of warfare and the United States controls the world financial system. Russia is being engaged by the US on the US’s terms. And this doesn’t sound particularly adroit to me. I hope I am wrong and that Putin has something up his sleeve, but I don’t see any evidence of this.

Putin should declare the state of emergency
Purge the government, nationalise the Reserve Bank
Cut off all conections with Europe ( gas, banks … etc )

And make it clear to any European state that Russia is open to restore relations with any sovereign government on equal terms.

Yes it sounds unreal, isolated, but it would spell the end of humiliation at least.
By doing so any economic or MSM assault has no use.
What would they do ? invade Russia …. I doubt …. they would come first with some offer.

People are united, what’s needed is to purge the unwanted element only.

I read what the Saker said about that and today you are saying the contrary. He might have wished such a purge and I understand him. For me, Putin is a sphinx. It is hard to tell where he is heading. Most of the time, you discover what he has been doing after the fact. Twice he saves Syria, first when by having Assad giving up his chemical weapon, he stopped the war planned by Washington. Second when he Syrian army was close to being defeated, he sent the Russian Air force and qualified advisers to put back Assad on his horse. Today, he says that the Russian have done their job. It is true that he never committed to win the war. Yet the terrorists are still there with the support of KSA, Qatar, Turkey and NATO. So I have a hard time to understand Putin.
He knows that the EU is controlled by Washington and the Zionists. He knows that he West is always cheating and lying, why negotiate with them, he is loosing his time unless he has concluded that the war is inevitable and he is not ready for it. Putin is a mystery.

Mercouris is clearly at odds with The Saker, unless the latter has changed his position since one month old article “Is Putin preparing a governmental purge?“. There The Saker states this among other things.

Does this indicate that Putin is preparing purge of the 5th columnists?

I am neither a prophet nor a mind reader. I cannot tell what Putin is planning or what the future holds. But I think that when we look at all the facts listed above we can say that they certainly seem to point in that direction. And if we look at the way Putin deal with similar challenges in the past we also can observe a pattern.

Putin has a history of deliberately letting a situation rot before taking action.

I hope Saker’s interpretation of the ongoing process in Russia is right, but the cynical realist in me knows, that Putin has a “free-market” economic conviction; he never really questioned the oligarch model of operation – he may barred them from all-encompassing political influence, but that’s pretty much it.
You just have to listen to Delyagin, Khazin or Glazyev to get an idea how bad the situation really is (I highly recommend the Moscow Economic Forum – it is really telling how almost ALL media didn’t report on it) nevermind the sheer desperation of the people, who are still intellectually capable of envisioning a different mode of production and living.

Alexander is a capitalist and defends the institutional status quo in Russia, by his logic, there is nothing fundamentally wrong with the RCB, open-rob-free-for-all currency market, neoliberal transformation of the entire Russian society. If you want to know more about this almost completed transformation (2014 was a real stagnation in this regard…), you should watch the russian tv channel “День тв” (esp. those youtube videos, which feature social scientist, who focus on education).

Let’s face it, the current ruling Russian elite is intrinsically pro-Western and if it wasn’t for Putin (and some of his associates), Russia would have ceased to exist. He was and is the historical “emergency brake” of the Russian people. There is nothing visionary about that.

The EEU could have been the foundation for an independent Eurasian entity in the future, a mighty armor that protects the sovereignty of the Eurasian people, but as it stands now, it’s little more than a harmonisation scheme for the economies involved.

Summa sumarum, more of the same, maybe a revolution if current econ policies are pursuit and a long term prospect of poverty and sovereignty on paper but (real life) economic b*ch status to either China or the US.

“He was and is the historical “emergency brake” of the Russian people.”

If, by inference, you mean the “people” of the USSR had dissolution forced upon them in the early 90’s (against a popular vote) then that is a given – in that vote they they railed against the oligarch model of operation.

However, the “common people” are generally led (for good or bad) – unfortunately there has been no popular uprising against the inaction of their will.

The USSR was the seed of a good & decent world – however, Russia, as it’s organisation currently stands, is the antithesis of that.

Depressing article, although the author seems to think it’s good news. Unfortunately, it reinforces my more pessimistic assessment of the Putin mystery.

All countries within the current global order have a role to play. Each country is utilized by global investment capital in such as way as to maximize net transfer of wealth to money centers such as the City of London and Wall Street. Each country must accept its role without negotiation or compromise. The local oligarchs of individual countries are essentially managers who assure access to resources and receive material rewards for their services.

It seems to me that Putin and the group of oligarchs supporting him are seeking to establish a compromise position in which they retain a good deal of sovereign independence and perhaps an inordinate share of the wealth of Russia. If this is the case, I don’t believe this will be successful.

Thanks for this reassuring assessment. At this crucial juncture, Russia needs to be strong and united.

That being said, under the threat from the west, Russia needs to be sovereign, independent and self-sufficient. The policy of welcoming investment and other western values is troublesome. In the long run this will weaken Russia because it’s dependent on shaky moral values. Usury is just plain immoral and unsustainable for the earth, including Russia.

Of course, something like usury is not going to disappear, unless nature herself decides to clean house through war or economic collapse. Then Russia will be forced to rely on herself.

Russia is our last hope. I hope she doesn’t end up like the Alamo in the US, where “remember the Alamo” became a rallying battle cry. If Russia goes Alamo, there are no reinforcements this time. Russia rightly remembers Stalingrad and other signal stands, but now she truly stands almost alone. China and others may help but if Russia fails they will be next on the chopping block.

“… Rather they want him – as they think – to be himself by sacking the liberals in his government. …”

Exactly that. They think that he would be “himself” if he sacked these. They think that he is not one of them. And that is where they are wrong. And they are not the only they who think that, unfortunately.

I don’t know how it all started. Probably, first people contrasted him with the alcoholic Yeltsin, and said, Thank God, this one doesn’t drink. … And then with the 2008 correct move in Georgia expectations took off sky high. Dormant fond memories of the mighty USSR, and from further back in Russian history, gained wings (as, hand in hand, the “disappointment” grew in the west).

While Putin actually remained the same throughout.

The same who, is another question. During the Russian débâcle in Libya, any unbiased observer would notice that it could not all be “Medvedev”: that separating the duo was a clear fiction.

Those are the same people.

The supposed Atlanticists-Euroasians duality appears to be a fiction equally. Perhaps even deliberate, and an effective one if so.

Finding out the answer to the main above question, “who?”, could be gotten with absolute certainty only in retrospect, after the events unfolded. Meanwhile, we can console ourselves thinking that he is the only game in town. Although it won’t matter an iota what we think.

What Alexander Mercouris write seems very convincing to me. I attended an annual conference in St. Petersburg from 19-21 May. It included an economics panel that I missed because I was in another panel but there was a plenary session with a lively debate between economists, including a former Soviet planning economist and Sergei Glaziev, who is one of Putin’s advisers (along with Alex Kudrin who was not present). Glaziev advocated an ‘integral’ approach which sounded to me a bit like French indicative planning. That would be consistent with the present state ownership of strategically important companies. This debate was somewhat rancorous but not on the part of Glaziev. Rather it was the chair of the session who went out of his way to insult people personally, including describing an economics minister as the ‘minister for the destruction of the economy’. A chair of a session should really not be pushing his personal views so hard. Rather he should be facilitating the interchange of views among those invited to participate. Yet the debate was indeed lively if otherwise well-mannered.

The continuation of the neoliberal economic policies aiming to fully integrate Russian economy into the globalist economy is a recipe for disaster. With the current trends, Russia will not be able to resist the western economic attack as it is more integrated with the NWO and much more vulnerable than what was the USSR.
In order to survive, Russia must reverse privatisation and re-nationalise strategic assets and corporations, reform and nationalise its central banking system, protect its economy, and take steps to create a self-sufficient economy by rebuilding its industrial and productive base.

I would like to add some interesting articles that explain these issues:

The following article by Takis Fotopoulos is about the Russian options about the direction of the economy:

1. A Market economy integrated into the NWO
2. A non-market economy outside the NWO
3. An intermediate socially-controlled market economy (* which according to the author is the best choice at the moment)

Also, according to Paul Craig Roberts, Russia needs to stop any privatisation plans

* Essentially, those Russians allied with the West—“Atlanticist Integrationists”— who want Russia to sacrifice its sovereignty to integration with the Western empire are using neoliberal economics to entrap Putin and breach Russia’s control over its own economy that Putin reestablished after the Yeltsin years when Russia was looted by foreign interests.
* The problem is that the more economic power moves from government to private control, the less countervailing power the government has against private interests.
* Globalization was invented as a tool of American Empire. Russia should be shielding itself from globalization, not opening itself to it. Privatization is the vehicle to undercut economic sovereignty and increase profits by raising price.
*Russia will not be safe from Western manipulation until its economy is closed to Western attempts to reshape Russia’s economy in the interest of Washington and not in the interest of Russia.

By Paul Craig Roberts “Privatization Is the Atlanticist Strategy to Attack Russia”

Generally a good article but also frustrating. Unfortunately there is almost no mention whatsoever of banking and finance. How will the money supply be controlled, for example? Will the ruble be allowed to float? Pegged to the dollar or Euro? What about foreign debt outstanding?

Also frustrating was the dismissal of Soviet economic and financial structures.as possible models. The Soviet Union was the world’s second largest economy and able to resist hybrid warfare attacks for seventy years.

It’s also not clear to me exactly what long term economic goals are sought by the Russian leadership. So all this advice may be irrelevant.

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